Here's why the Antisense Therapeutics (ASX:ANP) share price has plummeted 19% on Monday

Investors have not responded positively to the healthcare company's updates today.

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Shares in biopharmaceutical company Antisense Therapeutics Limited (ASX: ANP) made an abrupt downturn today and finished the session 18.64% lower at 24 cents apiece.

The Antisense Therapeutics share price fell sharply after the company released a key update to the market today regarding its current and upcoming clinical programs.

Here are the details.

What did Antisense announce?

Antisense advised that it received the thumbs up from European regulators regarding the next steps to authorisation of its drug candidate ATL1102. The drug is being investigated as a potential remedial and medical breakthrough in the treatment of non-ambulant boys with Duchenne muscular dystrophy (DMD).

As the company is currently running a Phase IIb/III trial for the compound, the news ensures the study will be completed in accordance to European standards. This earmark is an integral step of approval for getting drugs to market in the EU.

As a result of the update, Antisense also announced that it has "received firm commitments in an oversubscribed institutional placement" to raise $20 million via an issue of approximately 83.3 million new fully paid ordinary shares.

About the placement

The placement was at a value of 24 cents per share – a corresponding 16% discount from Antisense's opening price on Monday – and represents around 12% of Antisense's fully diluted float at the time of writing.

Shareholders will therefore be diluted by that amount once the transaction and share allotment settles on Thursday.

Antisense noted that the placement was "strongly supported by existing shareholders, with the company also welcoming a number of new institutional investors to the share register".

Aside from this placement, the company also intends to conduct a non-underwritten 1 for 9.4 entitlement offer to raise an additional $16.8 million at the same 24 cents per share.

One caveat embedded into both placement includes 1:2 free-attaching options issued to participants in both offers.

If all options are fully exercised, this will raise a further $36.8 million to "fund the clinical program through to Phase IIb/III trial results in mid-2024 whilst also funding the open label extension study at the same point".

What's the money for?

All-in-all, Antisense intends to use the monies from both financing rounds to fund a series of advancements, including:

  • Progression of the current Phase IIb/III DMD clinical trial
  • Startup costs for an open label expansion study
  • Drug manufacturing costs
  • Ongoing research and development (R&D) commitments
  • Working capital requirements for ongoing operations.

Antisense laid out additional details of its operations, the capital raising plans, and its ongoing clinical programmes in an investor presentation today as well.

Management commentary

Speaking on the announcement, Antisense managing director Mark Diamond said:

We are both pleased and extremely proud to have received this positive opinion… which provides us with great confidence to undertake our Phase IIb/III trial in DMD in a manner consistent with the expectations of the regulator and which if successfully completed, could bring us an approval to market ATL1102 for the treatment of DMD in Europe, the world's second largest pharmaceutical market.

Antisense Therapeutics share price snapshot

The Antisense Therapeutics share price has been an outsized performer this last 12 months, gaining 123% in that time after rallying 88% since January 1 this year.

Both of these results are a step ahead of the benchmark S&P/ASX 200 index (ASX: XJO)'s climb of around 25% in the same time.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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